Why Oil Prices Jumped After Attacks on Iran

In late February and into early March 2026 the United States and Israel carried out coordinated strikes inside Iran, and the attacks prompted missile and drone exchanges across the region. Markets reacted immediately: Brent traded around $80 per barrel while U.S. crude moved toward the low $70s as traders priced the risk of interrupted flows.

The Strait of Hormuz, which handles about 20% of global oil shipments, saw attacks on vessels and a reduction in transit, forcing some companies to suspend sailings. Insurance premiums for ships rose and routes were lengthened, increasing costs for shippers and refiners and adding to market pressure. Some analysts estimated that a full closure of the strait could cut 8 to 10 million barrels per day from world supply, which would be a major disruption.

OPEC+ has agreed to increase output by 206,000 barrels per day from April to help steady supplies, although most analysts note that only a few producers have spare capacity. Storage and trading desks in Asia and Europe have adjusted positions; futures and options markets show elevated volatility while physical traders scramble to find cargoes. Banks, refiners and shipping firms are hedging exposure and checking insurance cover.

The near-term outlook depends on whether shipping lanes reopen and on diplomatic moves, but consumers may see higher fuel bills if disruptions continue. Governments and firms are reviewing inventories and contingency plans while traders watch for signs that flows will normalize. If normal flows do not return, countries may tap strategic reserves and refiners may adjust runs, but such steps take time.